Britain's Rolls-Royce Quietly Seeks a Buyer
THE Rolls-Royce - claimed by its British makers to be the world's most sumptuous and prestigious car - is having a bumpy ride and may have to look to Germany or Japan for a smoother future.
Sir David Plastow, chief executive of the Vickers engineering group which has owned Rolls-Royce Motor Cars for the last dozen years, said in February that a sharp slump in sales on both sides of the Atlantic had contributed heavily to the parent company's 12 million British pounds (US $21.1 million) pre-tax losses in 1991.
Last year only 1,722 "Rollers" were sold, compared with 3,333 in 1990 - turning a 30 million British pounds Rolls-Royce trading profit into a 30 million British pounds loss.
Sir David denied that he was negotiating with a foreign buyer for Rolls-Royce Motor Cars, which includes the Bentley marque, but a source inside Vickers said the company was looking for a suitable purchaser.
The German motor company BMW was a likely bidder, the source said, and Toyota of Japan was also showing an interest.
In February, Eberhard von Kunheim, BMW's chairman, visited the Rolls-Royce plant at Crewe amid persistent reports that a German takeover bid for the company was likely. There was also an unconfirmed report in the London Sunday Times that Vickers had offered BMW a 30 percent stake in Rolls-Royce Motor Cars, but that Mr. von Kunheim had refused, demanding instead a total takeover.
Robert Golding, an analyst with Warburg Securities in London, says Vickers will come under intensifying pressure to sell Rolls-Royce. Heavy investment is needed in development of new models, Mr. Golding says.
Last year the company made a 40 percent cut in its workforce, ordered a three-day production week, and closed a car body plant near London. The closure signaled the end of production of the company's famous Phantom - a hand-crafted car weighing 2.5 tons and containing luxuries such as solid-silver fruit bowls and walnut picnic tables.
"There is a serious recession in the motor industry as a whole," says Garel Rhys, professor of motor-industry economics at the University of Wales. Rolls-Royce faced the additional problem of being at the very top end of a declining market.
There can be no doubt that the car with the distinctive vertically-fluted radiator grill is in the highest luxury class. The cheapest Roller - the Silver Spirit - costs 93,000 British pounds without extras. Prices for plusher models rise sky-high. A Corniche cannot be persuaded to roll off the showroom floor without the purchaser shelling out 150,000 British pounds. When Phantoms were in production they sold for between 350,000 British pounds and 500,000 British pounds.
Last year the company lost the equivalent of 17,000 British pounds on each Rolls-Royce sold.
Professor Rhys says selling off Rolls-Royce Motor Cars would be politically controversial, partly because the Roller is considered "quintessentially British" and also because such a move would raise questions about the future of Britain's car industry.
Two other famous British makes - Jaguar and Aston Marton - are already owned by Ford. General Motors owns the Lotus sports car marque. Rover, which has close commercial links with Honda, is Britain's only remaining volume car manufacturer. From this autumn, British-built Toyotas, Nissans, and Honda cars will be on the market.
"Rolls-Royce is the only major car manufacturer in this country that is still British-owned," Rhys says.
Industry experts suggest that the company needs at least 200 million British pounds in new capital.
The sale of Rolls-Royce would be complicated by the fact that the brand name and the RR trademark remain the property of the Rolls-Royce aerospace group, which used to own the car company. A foreign takeover would have to include negotiations with the aerospace company.